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NEW YORK: From Captain America, Spider-Man and Thor to the X-Men, Marvel's iconic pop culture superheroes all have had pivotal moments when they were brought to their knees, seemingly beyond all hope of salvation.

So it was too with with the comic book giant - which went from the pinnacle of the industry in the 1970s and 1980s, to bankruptcy, scandal, talent defections and all-out war among its investors in the 1990s.

Its hubris? An obsession with profit over what the Marvel empire had come to be loved for: Telling stories that served its fans. And like all good yarns, this one had its villain.

"The owners of Marvel became progressively less knowledgeable about and less interested in the comic books," said Mr Sean Howe, author of Marvel Comics: The Untold Story.

"They weren't in it for the long haul. They wanted to make as much money as they could make right now right here, and damn the consequences," as former sales director Lou Bank put it.

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The story of how the New York-based company reinvented itself in its darkest hour, and fought its way back to the top of the entertainment world with a risky gamble on movie blockbusters, is told in the new season of Inside the Storm: Back from the Brink - a series about legacy companies that have rebuilt themselves from near collapse.

SUPERHEROES WITH PROBLEMS

The tale of the company that, as former group editor Danny Fingeroth put it, "revolutionised the superhero comic", began as a pulp fiction publisher known as Timely in the late 1930s, when the superheroes people know today were born.

Its rival DC Comics started out well ahead in the game. "Marvel was always the second-place company. Superman and Batman at DC Comics were the industry standard, and Marvel was sort of the scrappy other player,” said Mr Howe.

Timely found success when the United States entered the Second World War, and the publisher's creation Captain America struck a chord with soldiers and their families. But the golden age of comics was followed by a movement against gore in comic books, and by the 1960s Marvel - as Timely had become - struggled to stay afloat.

Once again, the company found inspiration from DC Comics, which had thrown together its most popular characters into a single group: The Justice League, which became a surprise hit (and a film now showing in cinemas).

Marvel’s response was the Fantastic Four, heroes who had not only superpowers, but also problems readers could relate to - which broke with superhero conventions of the day.

What set Marvel apart, said Mr Fingeroth, who wrote and edited some of the company’s stories from 1977 to 1995, was that the comics "gave you a depth of characterisation where people could work together but not like each other, or like each other but be angry at each other, or quit the team. As far as comic books (go), that was fairly unprecedented.”

In 1962, Marvel strayed further from comic conventions when it ushered in the rise of the teenage superhero with Spider-Man, who became the most popular comic hero since Superman.

Marvel’s biggest innovation, however, was just round the corner.

TOP (UNDER)DOG

As more superheroes emerged, they began to interact and cross over into each other’s stories. The interwoven storylines became known as the Marvel Universe. And it was not the only thing editor-in-chief Stan Lee and his collaborators forged.

In periodic updates, he gave readers a glimpse into the workings of the Marvel office, featuring writers, artists and even secretaries. “You had a sense that you knew the people behind the stories,” Mr Howe said about the fan impact.

Stan Lee, the creative genius behind Marvel.

Within a few years, Marvel was selling 50 million copies a year, with its superheroes becoming stars on animated television shows. It became the world’s top comic company - yet somehow retained its underdog status, which some saw as a good thing.

Mr Bank said: “DC Comics was Superman and Batman and Wonder Woman, and everybody knew those characters. But … we were like the struggling company.

We had Spider-Man and the Hulk and these guys who had problems, and so even though we had the best-selling comics, we were still the underdog… It felt as if we were all fighting the good fight.

But that changed as the industry boomed worldwide in the 1980s, when Marvel attracted the interest of businessman Ronald Perelman, who bought it for US$82.5 million (S$112 million) in 1989.

NEW OWNER, HIGHER PRICES

“He was a corporate raider. He was somebody who had no emotional connection to the comics,” said Mr Howe.

Mr Bank remembers the first time he saw the new owner, who “looked as if he owned the world, being toured through the offices by a young woman dressed as Spider-Woman”.

"To me, that's who Ron Perelman will always be: This guy who owns the world and who can make young women dress up in spandex," he said.

Millionaire financier Ronald Perelman bought Marvel in 1989.

Mr Perelman's entrance came amid a period where comic books had evolved from more than just cheap, disposable entertainment, to valuable investments and collectibles. Speculators and collectors could make thousands off a vintage issue - one that cost US$400 in the 1970s for instance, could be exponentially more valuable at US$5,000 in the 1980s.

To drive growth by appealing to collectors, Mr Perelman first set out to raise the price of comics by appealing to collectors through, for example, glow-in-the-dark covers, foil covers and hologram covers.

Mr Bank recalled: “Adding a glow-in-the-dark cover caused us to take that same 32-page comic book that we sold for US$1.50 and instead make it US$2.95. And the short-term consequence was that we would sell four times as many copies.”

Initially, the strategy worked. Over the next couple of years, Marvel's revenues and profits grew. In 1991, the company went public and its market value ballooned to US$3 billion.

“But the mood at Marvel changed significantly after the initial public offering,” said Mr Bank.

A WARNING IGNORED

With shareholders expecting bigger returns, the pressure for profits intensified, and the marketing team began to dictate the content.

Marvel supervillain Wilson Fisk.

Artists and writers were told to engineer more crossover stories featuring its best-selling superheroes. Plots also began to intertwine, so readers had to buy all related issues to make sense of them.

“All (we) had to do was put those (best-selling) characters into a low-selling comic, and suddenly (we) sold more copies because people wanted to maintain their complete Spider-Man collection or their complete Wolverine collection,” said Mr Bank.

But at some point, the guy who collects every appearance of Wolverine can no longer afford to. At some point, you chase the guy away by trying to take too much of his money.

As production increased, the quality of content began to suffer, and fans fell away.

But Marvel’s sales were still soaring because, unlike news-stands, specialty comic shops could not return unsold copies for a refund. If the issues did not sell, retailers had to shoulder the cost. The result was that the company could not tell how many comics were actually being sold - and unsold copies were piling up in shop basements.

When news of problems got to Mr Bank, he sent out field representatives to survey comic shops across the US. They found that every time Marvel sold its special editions, subsequent issues saw a 20 per cent decline in sales. Readers were getting tired of expensive, gimmicky comics marketed mainly to collectors and speculators.

The company continued to publish enhanced covers and began to include trading cards to encourage collectors, alienating more of its readers. “It just seemed absolutely absurd to me,” said Mr Bank, who saw the coming downfall of Marvel.

Former Marvel sales director Lou Bank.

IMPLOSION AND CRISIS

In 1992, the company received a huge blow: Many of its top creative talents, demoralised by the infighting between the marketing and editorial teams, left to join its rivals and to form their own publishing houses.

As readers followed their favourite artists to the new labels, Marvel's market share continued to drop. A year later, when speculators and collectors realised that the value of comics had been inflated, the industry imploded.

Publisher sales plunged, and many comic shops in the US closed down. It was no different in Singapore. Mr Bill Teoh, whose comic shop opened in 1987, was one of the few to survive but not without taking a hit. As he recalled,

$50,000 worth of comics were incinerated. It was a lot. I had to hire a truck to carry those to the incinerator.

Back in the US, Mr Perelman was using Marvel to go on a shopping spree that included not only trading card manufacturers but also a sticker company and a toy retailer, driving it into debts of more than US$600 million.

All the while, the company was moving further away from its core: Comics.

The reiteration of Spider-Man for the new millennium.

By 1995, Marvel was in crisis. Some 275 jobs were cut, or around 40 per cent of its comic business. The next year, its losses hit US$464 million, and its stock price collapsed to around US$2, from more than US$35 a share in 1993.

The company needed cash to keep running and repay its debts. But in a disagreement with bondholders over its future, Mr Perelman declared bankruptcy to facilitate his reorganisation plans without their consent. In doing so, he dragged Marvel’s reputation through the mud in a series of court battles.

Recalled Mr Howe: “There was something so absurd and grotesque about these cold-hearted men suing each other to have custody of something that, emotionally, a lot of comic readers thought belonged to them"

In the end, Mr Perelman was ousted from control of the company. But Marvel was still broke, surviving on a US$200 million loan that had to be repaid soon. It needed a superhero of its own to save the day.

REVIVAL

Enter Mr Peter Cuneo as its chief executive officer in 1999. He was known as a turnaround king, having guided six businesses, such as consumer product brands Clairol and Black & Decker, through tough times.

But hiring him to rescue Marvel was a risk. He knew nothing about the comic industry.

“I wasn’t particularly a comic book fan. I wasn't particularly immersed at all in the comic book world or the comic book community, so I had to learn that,” he said.

Mr Peter Cuneo was known as the 'turnaround king'.

With the company in disarray, its stock falling to as low as 96 cents a share and, at one point, with barely US$3 million in the bank, there was intense pressure on him, especially to get the cash it needed.

So for US$26 million, Marvel first sold its trading card companies, at a fraction of the US$436 million Mr Perelman had spent on them.

While searching for other ways to settle the company’s remaining debt, Mr Cuneo also had to start reviving its comics and getting its readership back. To reinvigorate its stories, he turned to some of the creatives who had left Marvel.

“A lot of (them) felt that they had been mistreated, frankly, by the company. Obviously, we wanted to get the best back, and so that's what I was doing: Basically, courting people,” he said. He instigated a change in atmosphere, giving his artists the freedom to work so that they felt “needed and rewarded”.

He also tasked comic fan Bill Jemas, the former sports and entertainment vice-president of The Madison Square Garden Company, with reviving Marvel’s superhero comics.

At the time, the company was publishing 50-odd monthly titles filled with plots threading back to the 1960s, which made it difficult to woo new readers and get them emotionally attached to the characters.

So Mr Jemas started a new series of comics that retold the stories of Marvel’s major characters with story upgrades for the new millennium. By the early 2000s, the company had reclaimed its lead in the industry.

WATCH: Fall and rise of an empire (4:40)

A NEW DIRECTION

Meanwhile, Mr Cuneo and his team had thought of another way to solve Marvel’s cash problems and repay its loans.

Focusing on its most valuable asset, its library of comic characters, the company began licensing them for toys, clothes, school supplies and video games. This business model did not require Marvel to put up much capital, Mr Cuneo noted.

But to generate more revenue, its characters needed to appeal to a wider market beyond comic fans. So Marvel turned to Hollywood.

The company’s previous deals with studios had had limited success, partly owing to the limits of technology and partly because Marvel had no creative control over the films - for example, the 1986 disaster that was Howard the Duck.

This time, the company decided to tightly control how its films were made, from commissioning the scripts to hiring the directors to finding the right cast, and then partnering with the studios to produce and distribute the films.

Marvel was moving in a new direction: Towards dealing in intellectual property instead of selling products.

“We had to look at our characters as talent, and we had to treat them as if they were living people, but we had to also run them like brands,” said Mr Cuneo.

The hope was that a successful film would transform Marvel’s other businesses in toys, video games, school products, et cetera.

BLOCKBUSTER HITS

This stage of Marvel’s evolution had its beginnings with X-Men, released in 2000 to critical acclaim. The firm grossed nearly US$300 million worldwide.

Suddenly, superheroes were all the rage, and adaptations like Spider-Man, the Hulk and Daredevil soon went into production. After seven years of decline, Marvel was able to nurse its balance sheet back to health.

Jennifer Lawrence at the premiere of X-Men Apocalypse in central London. (AFP)

But its future was still uncertain. While its licensed films had been a success, it was not getting the full profits from Hollywood. When the first two Spider-Man films made a combined US$3 billion worldwide from box office, DVD and TV sales, the company received an estimated US$62 million only, as it had sold the character rights to Sony.

The idea that Marvel should produce its own films and keep all of the profits began to circulate in the office. It was a bold plan, but not everyone agreed it was a good one.

The company had never produced a film itself and a flop could cost millions. “The idea of us taking some financial risk on films wasn’t initially particularly popular with some of our investors,” said Mr Cuneo.

But what I think that people on the outside didn't understand is that we had been apprenticing on 12 films. We had learned how to make hits.

In 2005, the company’s board gave Marvel Studios the green light.

To finance its films, the company struck a deal with Merrill Lynch, offering the wealth management firm the movie rights to 10 of its characters, including The Avengers, as collateral for a US$525 million cash reservoir to make 10 films.

As Marvel Studios went ahead with its first film, Iron Man, it took another risk by casting Robert Downey Jr, better known for his drug and alcohol habits at the time than his acting talent.

The 2008 film was a success of course, largely owing to the actor’s take on the superhero. And in the post-credit scene, the studio set up The Avengers film that was coming.

Thus the Marvel Cinematic Universe was born.

From Ironman the movie.

Realising the potential in Marvel’s library of superheroes, Disney bought the company for US$4 billion in 2009. With Disney’s global reach, the tie-up catapulted Marvel’s characters to stardom. To date, its films have grossed over US$12 billion worldwide - making it the biggest film franchise in history.

TAKING ON MANGA AND ASIA

Marvel’s turnaround was helped by its popularity in Asia, where a new battle is brewing for the entertainment giant.

With the heart of its business, the comic industry, now in decline, it is looking to expand in the region. This means its superheroes must take on the girls of manga, which will not be easy.

“Manga is … very different to superheroes in the fact that a lot of the characters are very young, the arts side is very unique and the story types are very different to Western comics,” said Association of Comic Artists (Singapore) president Jerry Hinds.

“And manga, generally speaking, in Asia, is much more popular.”

To compete, the company knows it must build a stronger connection with Asian readers. Its newly minted editor-in-chief C B Cebulski said: “Marvel always had Asian characters, but truth be told, they’ve always been a little bit stereotypical.

They were created by writers based mainly in the West, and if it was a Japanese character, it was based on a ninja or a samurai or a geisha. If it was a Chinese character, it was always kung fu.

Not only has the company been looking for Asian artists – like Singaporean illustrator Gary Choo, who freelances for Marvel – to bring in more authenticity, it also has new characters that are starting to reflect its diverse fanbase.

Marvel's first Muslim superheroine to headlines her own comic as the latest Ms Marvel.

Take, for example, its first Muslim superheroine, a Pakistani-American teenager, to headline her own comic as the latest Ms Marvel. Singaporean illustrator Jerry Teo : “It's great because right now they're getting fans to understand that there's a bigger picture.”

So although films and licensing deals are now Marvel’s main business, it continues to develop its comics for a more global audience, based on a tradition of storytelling.

"I think any good story appeals to anyone, anywhere," said Mr Hinds. "Marvel has a wealth of characters that have never been explored... that should they get that right, they will be here for many, many years to come."

The new season of Inside the Storm: Back from the Brink tells the stories of how industry giants Marvel, Olympus, Philips and Nissan rebuilt themselves from near collapse. Watch the series online first at this link. Or catch episodes on Channel NewsAsia every Wednesday at 8pm SG/HK.

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